G&M – “Canada’s housing bubble about to burst, author says”

Hilliard MacBeth found his Canadian clients were “obsessed” with RE; he has written a book about the Canadian RE bubble & is calling for a 40%-50% price drop.
He also references “a very wise and astute money manager”, Jeremy Grantham.
Watch video here.

“Every single bubble bursts”.
G&M, 24 Sep 2014

39 responses to “G&M – “Canada’s housing bubble about to burst, author says”

  1. I hope the video will be translated to mandarin so the HAMs can watch it… one the other hand, HAMs do not care as housing is just a vehicle to hide their illegitimate money.

    • Seeking Knowledge...

      For those with money, HAM or otherwise, having a RE holding drop 50% is like one of my stock investment drop 50%. It bothers me, but I’ll hold on to it until it comes back up (like in 2009). However, for those who bought on margin and in the case of RE, with a large mortgage…watch out. I suspect there are a lot more people in Van with large mortgages than HAMs.

  2. Actually, RE related matters are intensely covered by the local mainstream Chinese newspapers Tsing Tao and Ming Tao.

      • Sometimes, GoogleTranslate… can be a lot of fun, RET…

        To wit, from today’s MingPao:

        “When Christy Clark met with [Guangdong Governor] Zhu Xiaodan yesterday, the two sides signed the “20th anniversary of the two provinces Nice Action Plan” mutual agreement”…

        http://www.mingpaocanada.com/Van/htm/News/20140926/vaa1h_r.htm

        [NoteToIllustriousEd: Any resemblance between Ming Pao’s feature illustration and Madame Tussauds’ current Premier Clark installation is, I am quite certain, purely coincidental. Oh yes… and strictly between the two of us – I was wondering whether, when Madame Premier consents to some, ahem, “Nice Action”… whether she delegates her generous offer of hospitality to an underling… or steps up to the plate herself. Just curious, I suppose.]

      • My Mandarin is letting me down today.
        Tsing Tao is a Chinese beer, of the German Lager variety.
        Actually, quite good beer.
        The newspaper is Sing Tao.
        The weekly readership for the 2 Chinese newspapers is around 600k, which is quite remarkable, given that the bulk of their readers is in Vancouver and Richmond.

      • I wasn’t going to mention your malapropism, RET… but, since you brought it up yourself… it seems only fair to point out that TsingTao is a truly outstanding beer… with a VeryDedicated occidental following… or, as we were wont to say, BackInTheDay, together we are, “UnitedInTaste”….

        BonusDragon:

        [NoteToIllustriousEd: It’s why, in the end, I decided to eschew TableTennis… and focus on the TaoOfTsing]

      • Nem,
        Agree, Tsing Tao is an excellent beer.
        I believe, it was once a German brewery.
        When I was China, a 1 litre bottle was one dollar.
        Sweet.

  3. vancouverites are real estate obsessed to point of insanity ….a result of vancouver being a poor opportunity backwater with no industry or fundamentals….people cling to RE for dear life in that city, since RE is the only game in town , theres no other industries

  4. The bubble has been about to burst for the better part of a decade now. We’ll see. The problem is that for those who are sitting on the sidelines because they can’t afford to buy, but want to, is that unless something cataclysmic happens to the economy, the drop in prices will be far slower than one’s personal life progresses over the years. Fast on a macroeconomic scale, painfully slow on a personal one.

    • Meanwhile, the homeowner’s payments against principal increases exponentially.

      I know of at least a couple of bears-in-principle who have bought over the last decade. They didn’t necessarily want to, but the timing was right for personal (life) reasons. I find they are more sheepish than bearish these days.

      • next stop is vcc

        Usually the best reasons for buying property have little to do with the property being a winning investment. Those are not always bad reasons and often critical for stability or peace in a family.

    • U.S. market peak-to-trough was about 4 years. Not exactly an eternity…

      • Formerly Know As...

        A lot can happen in 4 years. But when you’re bleeding money and can’t sell an illiquid asset, that can be quite the sudden shock.

  5. Usually the best reasons for buying property have little to do with the property being a winning investment. Those are not always bad reasons and often critical for stability or peace in a family.
    ——————
    Like “happy wife, good life”.

  6. After hearing stories about the Russian invasion, the cheaper loonie among other things, I also saw a fluff piece on CBC over the wknd re protests in HK and most importantly how this all may impact RE prices in Cda. Had a few laughs…. Yes, it really IS all about RE here all the time (in a close second comes hockey, just ask the Aquilini’s who have their hands in both baskets and must be expressing some concern right now about unsold seasons tix). Is buy a condo, get free Canucks tix just around the corner?

  7. Seeking Knowledge...

    I’m an RE bear, but does anyone think the protests in HK increase immigration or overseas investments to Vancouver, thus feeding into this RE insanity?

  8. I need to point it out to you and most of the posters here but you have all been completely wrong about housing bubbles and collapses now for over 5 years at least .
    Anyone care to admit that including the author of most of these utterly ridiculous boring articles ?

  9. Here is what Chinese think about RE investment – very simply. They aren’t making more land period. However, money, stocks, bonds are constantly being created. Given what owning land means in China historical, it is not hard to see Chinese putting money in RE. As well, with RE you just rent it out for $, you don’t need to actually like work hard like running/starting a business with its 12 hours days and such.

    • You’re right: this argument is simple. So simple it’s dumb. Just because “they’re not making any more land”, doesn’t make RE a good investment. There is really no shortage of land in the world, in Canada, and even in Vancouver for that matter.

  10. As for HK protests, most of the protestors are students who likely aren’t going to be able to afford $2M houses in Van or come here by themselves. Most regular day to day HK residents are not protesting or supporting students as Western media would have you believe. In fact, a lot of HK people don’t think this protest is really about democracy or anything bad that China is doing, but rather a bunch of idealist simply minded naive young people being taken advantage of by those who are power hungry.

    • Clearly you missed the memo re: China’s total disregard for democratic process, and its paranoia about dissenting voices (consider Beijing’s recent blocking of Instagram, among countless other attempts to snuff out free speech). But, hey, if you’re a deluded Vancouver RE bull, why let reality get in the way? Reality is soooo for lesser locales, not the Best Place on Earth!

  11. That’s true, but when?

    • next stop is vcc

      Looks pretty good. I’m assuming that you live there ted? I’ll be joining you soon.

      Although the increase in cost of good healthcare coverage will pretty much negate any higher wages I’ll be earning in San Diego, at least I’ll be employed in a field that I enjoy and be free of the real estate obsessed and rather snobby city that is Vancouver. It’s not that the cost of living wage balance is fantastically better there, it’s that there are jobs for people with my training and it’s at least as nice a place to live as Vancouver with better weather.

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